[isatrader]

Hi Isa,
I was hoping you could comment on silver and PAAS.
Many are commenting on how gold and silver are about to run much higher (they popped Thursday and Friday, especially silver) yet silver to me looks suspect on the weekly as it just got over its 30 MA which is declining since March and the weekly volume this week was very poor despite the price jump. Do you see red flags with silver?

Silver miners looks good based on the chart, I believe,  so I was wondering whether PAAS (chart looks good) could be a buy now or whether it should break its recent high of around 26 to enter long. Also, it seems you are focussing on gold miners not silver miners on your weekly watch list so wondering why you are not also focussing on silver miners (perhaps there is a red flag with these)?

Thanks for your thoughts.

Hi marry123,

I did actually highlight PAAS in my twitter stream yesterday earlier in the day, as it was showing good relative strength and a volume spike on the breakout from its handle pattern, and also SSRM came up on the 12th, and will be appearing in the weekend watchlist also, as it broke out yesterday following earnings results. So PAAS and SSRM are two of the strongest looking silver stocks currently imo.

Gold is testing its high, and so the mining stocks all got a boost this week, but it hasn't made the continuation breakout yet, although the mining stocks ETFs of the GDX and GDXJ did breakout, although volume was only slightly better than average in those. So it's by no means confirmed yet and could easily reverse still, as volume needs to come in for these stocks to breakout convincingly.

Silver, is much more volatile than Gold, and also its recovery from the March lows hasn't been anywhere near as strong, and hence only a few silver miners have appeared in the watchlists, compared to numerous gold stocks. And Silver has a much stronger correlation to the stock market than Gold, and so if the market pulls back then silver miners tend to also. So generally they haven't been appearing in the watchlist as not many have been showing strong RS and making good quality patterns yet. But as we noted above, there are a few beginning to come through.

But it's also crucial to remember that risk management is the priority with any trade entry point. So a good general rule is not try to buy too extended from the breakout level, of which a max +5% above the pivot point is a good general rule, although it might be a little bit higher max for more volatile stocks like silver miners depending on their Average True Range (ATR).